OPINION, P8 MONEY & MARKETS, P10 BENEFICIAL OWNER LIST EDITORIAL Had Gadgil advice been heeded, Kerala havoc would be less RBI nominees must not be on boards of banks, this makes it difficult to regulate them INTERNATIONAL, P14 WHAT'S COOKING Tyagi-led Sebi extends deadline to December for FPIs Apple plans to release revamped low-cost Macs to ignite sales NEW DELHI, WEDNESDAY, AUGUST 22, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL.XLIV NO. 148, 22 PAGES, `6.00 (PATNA `6.00, RAIPUR `7.00) P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 38,285.75 ▲ 7.00 NIFTY: 11,570.90 ▲ 19.15 NIKKEI 225: 22,219.73 ▲ 20.73 HANG SENG: 27,752.79 ▲ 154.77 `/$: 69.83 < > 0.00 `/€: 80.50 ▼ 0.78 BRENT: $72.61 ▲ $0.40 GOLD: `29,529 ▲ `148 — UNITECH CASE EXPRESS PHOTO: PREM NATH PANDEY SC orders sale of personal assets IN THE NEWS Pesky call rules: Trai to meet telcos soon THE TELECOM REGULATOR will look into concerns flagged by the industry on implementation of new pesky call rules, Trai chief RS Sharma said, reports PTI. He added that the serious issue of unsolicited telemarketing calls and messages cannot be “undermined”. Sharma has directed his officials to call operators for a meeting soon to understand their grievances around unsolicited commercial communication. Sensex, Nifty hit fresh highs MARKET BENCHMARKS SENSEX and Nifty extended their rise for the third straight session on Tuesday, reports PTI. Though gains were marginal, they ended the day at fresh closing highs on buying in pharma and IT stocks amid optimism over US-China trade talks. While the Sensex edged higher by 7 points to end at a new peak of 38,285.75, the Nifty logged its fresh closing high of 11,570.90, up 19.15 points. IT minister Ravi shankar Prasad with WhatsApp CEO Chris Daniels in New Delhi on Tuesday RUMOURS, BULK MESSAGES Govt to WhatsApp: Find solution Asap Seeks technological solution for traceability, local grievance officer and domestic corporate entity FE BUREAU New Delhi, August 21 THE GOVERNMENTONTuesdaycontinuedtobuilduppressure on the popularmessaging appWhatsApptocomeupwith a technological solution to ensure traceability of messages being circulated in bulk in any particular area of the country. Electronics and IT minister Ravi Shankar Prasad, who has been insisting on this, once again communicated the same to WhatsApp global CEO Chris Daniels, who met him earlier in the day. “I have said in the past that DECODING MESSAGES ■ WhatsApp messages can be traced to origin through source codes ■ Message has a source and a destination code — similar to mobile messages & email ■ Source codes do not break encryption so privacy not compromised ■ However, laws on duration of data storage are needed ■ Currently, there's no regulation globally also mandating how long WhatsApp needs to store data it is no rocket science to identify a message which is being circulated in lakhs on the same dayin the same area.You must have a mechanism to find a solution otherwise you could face abetment charges,” Prasad told reporters after the meeting. The minister said that he asked the WhatsApp CEO to appoint a grievance officer in thecountrywhocanactfaston complaints of fake messages being circulated on its platform. He said that WhatsApp has been asked to register a corporate entityin the country for better compliance with domestic laws. Though Daniels did not speaktothemedia,technology expertswithwhomFEspoketo said that while messages on WhatsApp are end-to-end encrypted and cannot be read by WhatsApp, the company can trace the origin of the messages through source code. Source codes are used in mobile phones and email networks to trace messages. Funds to be used for completing unfinished projects and refunding dues to its homebuyers ORDER, ORDER ■ Dhingra panel was formed in May to identify & auction unencumbered properties ■ Last month, under panel's supervision, land parcel in Bengaluru sold for `97 crore to Devas Global Services ■ SC has said homebuyers who have FE BUREAU New Delhi, August 21 received favourable judgments from consumer courts be given preference in refund CRACKING ITS WHIP on Unitech,the Supreme Court on Tuesday asked the Dhingra committee to sell all the unencumberedpersonalassetsofthe directors of the company to raise funds for completion of unfinishedprojectsandrefund dues to its homebuyers. Even though the apex court took the harsh step,Unitech said that all the assets of its directors are alreadyencumbered. AbenchheadedbyChiefJustice Dipak Misra also gave approval for leasing out two parcels of land in Kolkata after senior counsel Ranjit Kumar ■ Total 4,688 homebuyers have claimed a combined refund of `1,865 crore from Unitech Sinha, on behalf of Unitech, informedthecourtthattheUSbased Candor Investment is willing to pay `116 crore for leases for the two land parcels. Candor Investment, which managed property for the London-based Unitech Corporate Parks,wasboughtbyBrookfield Asset Management in 2014. The committee headed by formerDelhi High Court judge SN Dhingra was formed in May to identify and auction the unencumbered properties of the company, sale proceeds ofwhichwill be used to refund money to homebuyers as well as other interested parties. Last month, the company under the supervision of the committee sold a land parcel in Bengaluru for `97 crore to Devas Global Services. The apex court also said that homebuyers who have ● A NEW FIELD Move to free farm exports BANIKINKAR PATTANAYAK New Delhi, August 21 Continued on Page 2 FINMIN HARDENS STANCE Special Feature Teaching Ranchi’s visually impaired with new-age tech Thinkerbell Labs’ Smart Braille devices have been installed in a government school for the visually impaired in Ranchi to help them learn via gamified audio lessons ■ eFE, P13 QuickPicks Kerala calamity: Insurers see claims crossing `1,000 crore AS FLOODWATERS have started to recede in parts of Kerala, insurance companies expect claims from the affected people to cross `1,000 crore, reports Chirag Madia in Mumbai. On Monday, the government declared the deluge in the state as a 'calamity of severe nature'. So far, general insurance companies have received claims of around `200-250 crore. The state has been devastated by its worst floods in nearly 100 years, with landslides and flash floods killing more than 200 as ofTuesday and forced over 1 million out of their homes. PAGE 10 Glaxo to seek bids mid-Sept for $4-billion India unit Sale UK’S GLAXOSMITHKLINE has requested bids by mid-September for its $4.3-billion Indian consumer-health unit, which owns the popular brand Horlicks, sources said, reports Bloomberg. The sale has attracted interest from potential bidders, including Nestle, PepsiCo and Reckitt Benckiser, sources said. Glaxo announced in March that it aims to complete a strategic review of Horlicks and other products by the end of this year. It is assessing its 72.5% holding in India-listed GlaxoSmithKline Consumer Healthcare as part of that process. PAGE 6 HC seeks UIDAI, Centre reply on plea over Aadhaar security THE DELHI HC on Tuesday sought response of the UIDAI and the Centre on a plea raising concerns about Aadhaar data security, reports PTI. The HC issued a notice and sought the reply of authorities on the plea which also urged the court to direct the Centre to either allow people to opt out of the system or delete the entire existing UIDAI data. The matter is listed for further hearing on November 19. The plea alleges that there were several breaches ofAadhaar leading to leakage of personal information of individuals since January this year. PAGE 5 Centre clears PNB EDs’ prosecution FEELING THE HEAT NIRAV MODI FRAUD CASE SANJIV SHARAN KV BRAHMAJI RAO ■ USHAANANTHASUBRAMANIAN Position held: MD, PNB; MD, Allahabad Bank Position held: ED, PNB Status: Path cleared for prosecution BANIKINKAR PATTANAYAK New Delhi, August 21 THE GOVERNMENT IS learnt to have given its sanction to prosecute two executive directors (EDs) of Punjab National Bank (PNB) in connection with the $2.2-billion fraud at the state-run lender, involving jewellers Nirav Modi and Mehul Choksi. The two EDs — KV Brahmaji Rao and Sanjiv Sharan — were already divested of power in May, along with former PNB managing director Status: Dismissed from service; facing prosecution and then Allahabad Bank managing director (MD)Usha Ananthasubramanian, by their respective boards on a government directive. The finance ministry has hardened its stance against corruption in the public-sector banking space and has decided to strip any banker of power if probe agencies find incriminating evidence against their complicity in any fraud, a senior official told FE. Continued on Page 2 receivedfavourablejudgments from the consumer courts will be given preference while refundingthemoney.Atotalof 4,688 homebuyers have claimed refunds amounting to `1,865 crore from Unitech. They had booked their flats in various housing projects launched by the company. DuringthehearingonTuesday,HDFC Bank told the bench that Unitech was trying to sell itsencumberedassetsdespitea bar on selling them. However, Unitech denied the allegation. Unitech was supposed to deposit `750 crore by December to secure bail for its promoter-managingdirectorSanjay Chandra. He is seeking interim bail from the apex court after the Delhi High Court on August 11 last year rejected his plea in a criminal case lodged in 2015 by 158 home buyers of Unitech projects Wild Flower Country and Anthea Project in Gurugram. Thenextdateofhearinghas been fixed forSeptember11. Making the mark Saurabh Chaudhary (left), 16, became the youngest Indian shooter to strike gold with a record of 240.7 in the 10m air pistol event, the one in which marksman Abhishek Verma (219.3) picked up a bronze at the Asian Games on Tuesday PTI PRE-NELP BLOCKS ONGC seeks royalty, cess repayment SAURABH KUMAR New Delhi, August 21 TIMELINE STATE-RUN OIL EXPLORER ONGC has sought reimbursement of large amounts paid by it as royalty and cess on behalf of its exploration partners for the pre-New Hydrocarbon Licensing Policy(NELP) blocks, according to an official source. The move comes on the heels of the Union Cabinet decision in July that these taxes will now be paid by all contractors as per their participating interests (PIs) in blocks signed before 1999. In the 1990s, the government awarded some discoveredoilandgasfieldstoprivate companies in order to attract investments in the hydrocar- Pre-NELP blocks awarded; ONGC, OIL require to pay 100% of royalty and cess 1990s 2010 ONGC OKs Barmer oil field deal between Cairn Energy and Vedanta after the latter agrees to pay taxes as per stakes July 2018 Govt announces new policy as per which partners in all pre-NELP blocks will share royalty & cess, prospectively bon sector. As an incentive, however, the liability of payment of royalty and cess was put on state-run explorers (ONGC and Oil India) and they were made the licensees of the blocks. While ONGC and Oil IndiahadtheoptiontotakePIs of of 30-40% in the blocks or just remain the licenseeswithout any stake, they were required to pay 100% of the statutory levies. Seven such pre-NELP blocks are operational but these haven’t seen much fresh investments and one of the reasons for this is seentobetheonerouslevieson the state-run explorers. Continued on Page 2 Govt asks ONGC to list overseas arm OVL, Page 6 THE COMMERCE MINISTRY has moved a Cabinet note on farm export policy,seeking to keep the outbound shipment of processed and organic items free of any restriction, official sources told FE. Importantly, once the Cabinet approval for this proposal is in place, the commerce ministry will initiate consultations with the ministries of agriculture, food and consumer affairs to gather consensus on a policy to limit export curbs to only a very few farm items that are crucial to the country’s food security, and not all the dozen-odd items that are considered essential commodities. This means the scope for periodic curbs on exports of politically sensitive onion or pulses, cotton and sugar that the government has resorted to in the past will be ended if there is a consensus. These curbs include the imposition of minimum export price, export duty and an outright ban. “The commerce ministry’s view is that curbs on farm exports may be imposed only in case of a very few essential items like rice and wheat and that, too, only in exceptional circumstances and as a last resort. The idea behind the farm export policy is to help double farmers’ income by ensuring a predictable trade policy environment so that we establish ourselves as reliable suppliers in the export markets,” said one of the sources. Continued on Page 2 GST Slew of conflicting rulings by AAR threatens to hassle businesses SUMIT JHA New Delhi, August 21 A CLUTCH OF recent rulings — many mutually contradictory — by the benches of the Authority for Advance Ruling (AAR) on the goods and services tax (GST) has raised questions on the how mature the fledgling state-wise setup is and is threatening to inflate the tax and compliance costs of a cross-section of Indian industry. The latest in the series of such odd AAR orders is one by its Karnataka bench, which said in a case involving Columbia Asia Hospitals,a healthcare service provider, that the firm with a presence in multiple states must pay GST on salaries paid to employees at the central unit as they provide (supply) services to its units in other states. Tax experts have almost unanimously found the ruling not just bad in law but difficult to implement and onerous for businesses to comply NEED TO EVOLVE? ■ West Bengal AAR: ■ Maharashtra and ■ Delhi AAR: Goods sold at a ■ AP AAR: Transitioning Marketing services to foreign universities not exports even though such supplies, analysts feel, meet export criteria duty-free shop in Delhi airport taxable, going against precedent of treating such shops export units Karnataka AARs rule differently on the question of GST rate on solar plants installation of cess credit beyond its ambit Maharashtra AAR: rules against such transition with. The GST-AAR benches can’t speak in one voice, even on what tax rate would apply to a particular good/service. While the Maharashtra AAR had said the process of installing solar equipment (which includes the supply of goods and services) would attract 18% GST, the Karnataka bench ruled that a 5% rate would apply. Another AAR ruling that made the headlines recently wasonebyitsDelhiunit,which altered a long-held precedent to rule that GST applies on goods sold in an airport dutyfree shop. Sales at such shops, which are deemed export units,have been the beneficiaries of the policyof zero-rating of exports. While the enforceability of AARsordersareusuallylimited to the assessees involved in the relevant cases, these could set precedents,causing hardships to the taxpayer and leading to avoidable litigation. Continued on Page 2

The Financial Express (FE) is a business paper that’s closest to the people who are in the business of business. From business policies to market trends to new developments, The Financial Express comes packed with incisive news on every relevant issue.